The State of the Trend

Today we'll start by reposting the same chart from two weeks ago which shows
the monthly SPX still holding above the blue trendline. A break below will
be the first signal that a change in trend is under way:

And, although that's a positive for the market, we need to point out that
last week marks the end of the seasonally strong first half of the year. Another
reason for concern is the fact that SPX momentum has been declining for a week,
and price is finally catching up:

The list of concerns cannot be complete without mentioning the divergence
between the SPX and the DJIA, and the broader indices like the NDX and IWM.

Which brings us to a story, just published
by BI, about carnage in some high beta tech stocks. The companies in
question are ALNY, BNFT, CLDX, CSOD, DDD, EXEL, FEYE, FUEL, GIMO, HALO, IMPV
AND MKTO. To our surprise, out of more than 100 positive analyst recommendations
(hold and
stronger) for the group as a whole, there are only 2 sell recommendations,
one for DDD and one for HALO. This prompted us to review the default weekly OT
Signals ratings. There, by contrast, all the stocks received weekly sell
signals in the period between February 24 and March 24, 2014:

Gold and silver barely made it above key support levels on the back of escalating
geopolitical tensions. In our opinion, it would be very naïve to expect
a quick and amicable resolution of the conflict in Ukraine but, despite that
fact, we cannot get bullish on gold until it breaks above the 50% retracement
level: